N.J. truck repair shop at center of $2.7M insurance fraud scheme
Truck owners used the repair shop’s address to gain rates more favorable than where the vehicles were actually kept.
The owner of a New Jersey truck repair shop and eleven others are being charged with racketeering, insurance fraud and theft by deception for their involvement in a plan, which resulted in the underpayment of $2.7 million in premiums in 2021, according to the Warren County Prosecutor’s Office.
The shop owner allowed various agents and producers to list his shop’s address as the garaging address for roughly 170 trucking companies to claim that almost 400 trucks were being garaged on the premises when the premises could only hold around 30 vehicles. Insurer employees noticed a large number of applications for commercial trucking companies claiming to garage vehicles at the same address. Surveillance substantiated that none of the vehicles in question were parked on the lot.
The investigation into the scam was conducted by the Warren County Prosecutor’s Office, Sussex County Prosecutor’s Office and the New Jersey Automotive Insurance Plan.
Insurance premiums are particularly low in that area, and the producers involved would offer the vehicle owner the option of claiming that the vehicles were garaged at the premises in question when quotes for the actual garaging address were costly.
The insureds were told they didn’t have to actually locate the vehicles there, it was just used for insurance purposes. In reality, these vehicles could be found as far away as North Carolina and New York. While the charges are for $2.7 million in underpaid premiums in 2021, a total of $20 million has been underpaid in premiums since 2018.
“I am extremely proud of the success of the joint Warren and Sussex Counties insurance fraud investigation. The investigation resulted in the arrest of a dozen individuals whose actions were costing the citizens of New Jersey and Warren and Sussex Counties millions of dollars a year in increased insurance premiums,” Warren County Prosecutor James Pfeiffer said in a release. “It is estimated that insurance fraud costs consumers $40 billion per year resulting in increased insurance premium costs to families of upwards of $700 annually.”
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